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Chinese Journal of Management Science ›› 2012, Vol. 20 ›› Issue (6): 94-101.

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Economic Order Quantity Model under Three Levels with Payment Delay Considering Bad Debt

QIN Juan-juan   

  1. Business School in Tianjin University of Finance and Economics, Tianjin 300222,China
  • Received:2010-10-10 Revised:2012-07-10 Online:2012-12-29 Published:2012-12-28

Abstract: Optimal retailer's replennishment policies is discussed with bad debt and payment delay in the three-stage supply chain with the dominant retailer.The effect of bad debt is analyzed on the interest earned and interest charged to build the models of the retailer's decision in two cases.By analyzing the model, the retailer's optimal replenishment time and the optimal order quantity are obtained.Furthermore, the effect of parameters on the retailer’s optimal order policies is analyzed.Finally, the numerical analysis is presented to demonstrate the conclusions.

Key words: the dominant retailer, payment delay, EOQ, the rate of bad debt

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